WONG YIU v. LEUNG SUM AND ANOTHER

HEADNOTE

One of the vendors of property was described in the conveyance to the vendors by a name slightly different from that appearing on his identity card. The purchasers were represented in the conveyancing transaction by the same solicitors as the vendors, but appeared in person before the Court.

HELD : The facts did not appear to raise any real question as to title, but the application would be adjourned to enable the vendors' solicitors further to consider the matter.

(Observations on the undesirability of solicitors acting for both parties in a conveyancing transaction and of vendors' solicitors causing purchasers to appear before the Court in person.)

M.P. No. 2421 of 1987

IN THE SUPREME COURT OF HONG KONG

HIGH COURT

MISCELLANEOUS PROCEEDINGS

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BETWEEN

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JUDGMENT

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1. This is a vendor and purchaser summons (as usual, with an unnecessarily long-winded title). A vendor or purchaser of land may apply by such a summons to the Court in respect of any question arising out of or connected with any contract for the sale of land, and the Court may make such order upon the summons and as to the costs as to the Court appears just: see S.12 (1) of the Conveyancing and Property Ordinance, Cap. 219.

2. This provision of the Conveyancing and Property Ordinance is the equivalent in Hong Kong of what is now s.49(1) of the English Law of Property Act, 1925 (it was originally enacted in 1874).

3. As the English authorities show, the proper purpose of a vendor and purchaser summons is really to obtain, in a summary way, a decision on isolated points about which the parties are at issue, and which would otherwise have to be resolved in an action. For example, a vendor and purchaser summons may properly be taken out when there is a question as to whether a requisition has been sufficiently answered or an objection sufficiently met; or for settling minor points of law or of construction: see In re Burroughs (1877) 5 Ch. D. 601.

4. And the decision binds the parties only: see In re Naylor and Spendla's Contract (1886) 34 Ch. D. 217 per Cotton LJ at p.220. Accordingly the point decided on a vendor and purchaser summons as between one vendor and his purchaser may be raised again when the purchaser re-sells: see In re Osborne's Contract (1880) 13 Ch. D. 774.

5. So the jurisdiction of the Court on a vendor and purchaser summons is declaratory, not curative. There appears to be a belief in Hong Kong that the purpose of a vendor and purchaser summons is to enable a vendor who, having considered the state of his own title, and having seen that there is or may be something technically wrong with it, to come to the Court, ex parte if he chooses in order to get the Court to declare that there is a "good title" to the property, whether or not that is the case. This is not the purpose of a vendor and purchaser summons. It is a means by which a vendor "may cheaply and quickly obtain a judicial opinion on the title which will bind all parties before the Court and then sell his property with the benefit or burden of such decision": See In re Nichols' v. Von Joel's Contract [1910] 1 Ch. 43 per Farwell J at p.48. But that is all.

6. The Court is not here to issue title indemnity insurance to vendors. The declaration of the Court is good only between the vendor and his immediate purchaser, and his immediate purchaser does not get the benefit of an assurance that, in future, no subsequent purchaser will be able to take the same point.

7. The misconceptions which have arisen in Hong Kong are due in part, in my judgment, to the unfortunate practice which still prevails here in which a solicitor acts for both sides in a conveyancing transaction, and, worse, continues so to act even after a question on the title has arisen. It is not uncommon for solicitors to appear before the Court on a vendor and purchaser summons on behalf of the vendor and to bring to the hearing the purchaser in person, for whom they are still acting in the transaction. The purchaser is frequently incapable of following the proceedings, except with the aid of an interpreter, and cannot be expected to understand them. It transpires that there is really no dispute at all between the vendor and the purchaser. What has happened is that the solicitors for the vendor, anxious to get an assurance from the Court as to his title, have continued to act for both sides in the conveyancing transaction, and usually have not even troubled to advise the purchaser to take separate and independent legal advice. This will not do. Either there is a question between the parties on the title, in which case the parties need separate representation, or there is not, in which case there is no room for the exercise of the jurisdiction at all.

8. The present case is an example. The Vendors (only one of whom is named as a plaintiff, which is quite incorrect) are represented in the conveyancing transaction by a firm of solicitors. The Purchasers are not represented by separate solicitors but have instructed the Vendors' solicitors to act for them in the transaction.

9. The facts are as follows.

10. The Vendors acquired the property under a conveyance dated 20th May 1964. In this conveyance, they were described as "Wong Chung-kwan" and "Wong Yiu-kwan". Wong Yiu-kwan holds a Hong Kong identity card No. XXXXXXX(X), not in the name of Wong Yiu-kwan but in the name of Wong Yiu.

11. It often happens in Hong Kong that the holder of a Hong Kong identity card in fact uses a number of different names. Why it should be thought necessary to concern oneself with this as a matter of title passes my comprehension. But even if the point is of significance, it was in the present case amply cured by the statutory declarations of Wong Yiu-kwan and Wong Chung-kwan as to the identity of the former. No purchaser properly advised could possibly have objected to the title on this ground.

12. The evidence before me suggests that the Purchasers were not satisfied with the title to the property. But this was, of course, because they had been advised by the Vendors' own solicitors (the same solicitors) of this problem about the identity of Wong Yiu-kwan.

13. As at present advised, it seems to me that these proceedings are unnecessary. There is no real question as to the title. I cannot believe that any competent firm of solicitors, separately representing the Purchasers, would advise the Purchasers to maintain the supposed objection to the title, so there would be no question between the Vendor and the Purchasers which the Court would be called on to decide. The title offered by the Vendor to the Purchasers would simply be accepted.

14. In all these circumstances, I am minded to dismiss this Originating Summons; but I have decided it would not be right to do this without giving the Vendor's solicitors the opportunity of taking advice from counsel upon these matters, if they wish to do so, and the opportunity of sending the Purchasers off to be separately represented.

15. I suspect many of the conveyancing misconceptions which appear to persist in Hong Kong will be removed when (not before time) the profession realises that it is undesirable in principle for the same solicitor to act for both vendor and purchaser in a conveyancing transaction, most particularly when some question arises as to the vendor's title.Simply to encourage purchasers to act for themselves in person before the Court is quite unacceptable. They cannot sensibly do so, especially when, at the same time, the solicitors (behind the scenes) are busy acting for both sides in the conveyancing transaction. The sooner this is appreciated the better.

16. I will stand the case over generally with liberty to restore it before me if so advised.